nep-cmp New Economics Papers
on Computational Economics
Issue of 2017‒04‒30
ten papers chosen by

  1. The biofuel-development nexus: A meta-analysis By Johanna CHOUMERT; Pascale COMBES MOTEL; Charlain GUEGANG DJIMELI
  2. Is Value added Tax Progressive? Evidence from Egypt using a CGE Model By Abeer Elshennawy
  3. The Economic Effects of Labor Force Enhancement in the Asia-Pacific Region by Trade Liberalization By Sung , Hankyoung
  4. A CGE Analysis of Pakistan-Turkey Free Trade Agreement By Ali, Ashfaque
  5. Allocation rules of free allowances in the EU ETS system. A CGE analysis By Michal Antoszewski; Krzysztof Wójtowicz
  6. Value Function Iteration Toolkit: In Matlab, on the GPU. By Robert Kirkby
  7. A hybrid solution approach for the 3L-VRP with simultaneous delivery and pickups By Henriette Koch; Andreas Bortfeldt; Gerhard Wäscher
  8. Stochastic equilibrium modeling: The Impact of Uncertainty on the European Energy Market By Rolf Golombek; Kjell Arne Brekke; Michal Kaut; Sverre A.C. Kittelsen; Stein W. Wallace
  9. Spatiotemporal Traffic Forecasting: Review and Proposed Directions By Alireza Ermagun; David Levinson
  10. Interest Rate Volatility And Macroeconomic Dynamics: A Cross-Country Analysis By Michael Curran; Adnan Velic

  1. By: Johanna CHOUMERT (Centre d'Etudes et de Recherches sur le Développement International(CERDI)); Pascale COMBES MOTEL (Centre d'Etudes et de Recherches sur le Développement International(CERDI)); Charlain GUEGANG DJIMELI
    Abstract: While the production of biofuels has expanded in recent years, findings in the literature on its impact on growth and development remain contradictory. This paper presents a meta-analysis of computable general equilibrium studies published between 2006 and 2014. Using 26 studies, we shed light on why their results differ. We investigate factors such as biofuel type, geographic area and the characteristics of models employed. Our results indicate that the outcomes of CGE simulations are sensitive to model parameters and also suggest heterogenous effects of biofuel expansion between developed / emerging countries and Sub-Saharan African countries. Our quantitative meta-analysis complements existing narrative surveys and confirms that results are sensitive to key hypotheses on essential parameters. Simulations on longer time periods and in multi-country studies lead to results that indicate higher impacts of biofuel expansion on growth and household income. Moreover, simulations with a shock in agricultural productivity indicate positive welfare gains, unlike simulations with a shock on land expansion. Lastly, we find that biodiesels lead to higher welfare gains than biofuels.
    Keywords: Biofuel, Bioethanol, Biodiesel, Energy, Development, Meta-regression, Computable General Equilibrium Model.
    JEL: C68 O13 Q16
    Date: 2017–04
  2. By: Abeer Elshennawy
    Abstract: The objective is examine the effect of value added tax in Egypt on income distribution and inflation CGE model Contrary to the experience of many countries, the value added tax was found to be marginally progressive
    Keywords: Egypt, General equilibrium modeling, Macroeconometric modeling
    Date: 2016–07–04
  3. By: Sung , Hankyoung (University of Seoul)
    Abstract: This paper uses the most recent Global Trade Analysis Project (GTAP) DB version 9 and a recursive dynamic computable general equilibrium model (CGE) to analyze the economic effect of enhancement in labor productivity that trade liberalization has in the APEC. In particular, unlike the previous studies that apply tariff reduction, this paper focuses on the changes in labor productivity reported by Ahn et al. (2016). The results show an increase in the real GDP of countries with gains in labor productivity. In particular, the results of this study indicate that the benefits of trade liberalization would be even larger for developed countries with a similar level of gains in labor productivity. It is also suggested that the efficiency of production structure or scale of economy may work for developed economies. In conclusion, this paper suggests another reason to pursue trade liberalization within in the APEC region.
    Keywords: Labor Productivity; Dynamic CGE Model; Trade Liberalization; Real GDP
    Date: 2016–11–30
  4. By: Ali, Ashfaque
    Abstract: This paper investigates the possible impacts of Pakistan-Turkey free trade agreement (Pak-Turk FTA) on various sectors of the economy in the two countries under four different possible FTA scenarios by using computable general equilibrium model GTAP. Global Trade Analysis Project (GTAP) model has been extensively used in FTAs and other Trade related studies to evaluate the economy-wide potential impact of economic policy reforms. Current study uses the GTAP database7 which includes; 57 tradable commodities and 113 regions across the world. Our findings suggest that; Turkey is more beneficial from Free Trade Agreement as compared to Pakistan .Overall impact of trade liberalization is favorable for both economies, but liberalization of protected sectors may prove to be unfavorable for the economy in case of Pakistan. And there is a huge potential for bilateral trade in textile and chemical sector.
    Keywords: Computable General Equilibrium (CGE) Analysis, Free Trade Agreement (FTA), Pakistan, and Turkey.
    JEL: F10 F14 F17
    Date: 2017–04–14
  5. By: Michal Antoszewski; Krzysztof Wójtowicz
    Abstract: Unilateral emission reduction policy conducted by the EU may undermine competitiveness of European industries. In order to mitigate this risk, these industries are granted with free emission allowances based on their historical production („historical allocation”). However, another option which is currently discussed could be the linkage of free allowances amount to the current production level („dynamic allocation”). Such a rule which would not „punish” companies for output increases. Multi-sector, multi-region computable general equilibrium (CGE) model, calibrated to GTAP data. Counterfactual analysis aimed at comparison of various allocation rules. In general, dynamic allocation rule favors industries expected to record a relatively fast grow in the future. However, on the macroeconomic level, dynamic allocation rule differs very little from the historical one.
    Keywords: European Union, General equilibrium modeling, Energy and environmental policy
    Date: 2016–07–04
  6. By: Robert Kirkby
    Abstract: As part of evaluating economic policies Economists often want to solve Value Function Iteration problems, and then simulate various model outputs. The VFI Toolkit allows the user to easily solve these problems, automatically taking advantage of parallelization on the GPU and CPUs. Using the VFI Toolkit allows Economists to concentrate on the economics of the problem at hand. VFI Toolkit is already available from A Matlab Toolkit that makes it easy for the user to solve Value Function Iteration problems. Makes automatic use of parallelization on the GPU and CPUs. Roughly, the main command take the Return Function as an input, and gives the Value Function and Optimal Policy Functions as outputs. Work is completed, not preliminary. If it is felt that the presentation at EcoMod would benefit from a more applied example I am happy to construct one based on water management together with a colleague in my department who works on this topic. PS. If it is possible to do a poster in addition to an oral presentation that would be of interest.
    Keywords: Not applicable., Modeling: new developments, Optimization models
    Date: 2016–07–04
  7. By: Henriette Koch (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Andreas Bortfeldt (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg); Gerhard Wäscher (Faculty of Economics and Management, Otto-von-Guericke University Magdeburg)
    Abstract: This paper deals with a special vehicle routing problem with backhauls where each customer receives items from a depot and, at the same time, returns items back to the depot. Moreover, time windows are assumed and three-dimensional loading constraints are to be observed, i.e. the items are three-dimensional boxes and packing constraints, e.g. regarding load stability, are to be met. The resulting problem is the vehicle routing problem with simultaneous delivery and pickup (VRPSDP), time windows, and three-dimensional loading constraints (3L-VRPSDPTW). This problem occurs, for example, if retail stores are supplied by a central warehouse and wish to return packaging material. A particular challenge of the problem is to transport delivery and pickup items simultaneously on the same vehicle. In order to avoid any reloading effort during a tour, we consider two different loading approaches of vehicles: (i) loading from the back side with separation of the loading space into a delivery section and a pickup section and (ii) loading at the long side. A hybrid algorithm is proposed for the 3L-VRPSDPTW consisting of an adaptive large neighbourhood search for the routing and different packing heuristics for the loading part of the problem. Extensive numerical experiments are conducted with VRPSDP instances from the literature and newly generated instances for the 3LVRPSDPTW.
    Keywords: vehicle routing, backhauls, three-dimensional loading constraints, large neighbourhood search
    Date: 2017–04
  8. By: Rolf Golombek; Kjell Arne Brekke; Michal Kaut; Sverre A.C. Kittelsen; Stein W. Wallace
    Abstract: We present a simple approach to transform a deterministic numerical equilibrium model - where several agents simultaneously make decisions - into a stochastic equilibrium model. Our approach is used to build a large stochastic numerical equilibrium model of the Western European energy markets. We use the stochastic model to analyze the impact of economic uncertainty on the Western European energy markets; it is demonstrated that the equilibrium under uncertainty differs significantly from the deterministic outcome.
    Keywords: EU, Impact and scenario analysis, Agent-based modeling
    Date: 2016–07–04
  9. By: Alireza Ermagun; David Levinson (Nexus (Networks, Economics, and Urban Systems) Research Group, Department of Civil Engineering, University of Minnesota)
    Abstract: This paper systematically reviews studies that forecast short-term traffic conditions using spatial dependence between links. We synthesize 130 extracted research papers from two perspectives: (1) methodological framework, and (2) approach for capturing and incorporating spatial information. From the methodology side, spatial information boosts the accuracy of prediction, particularly in congested traffic regimes and for longer horizons. There is a broad and longstanding agreement that non-parametric methods outperform the naive statistical methods such as historical average, real time profile, and exponential smoothing. However, to make an inexorable conclusion regarding the performance of neural network methods against STARIMA family models, more research is needed in this field. From the spatial dependency detection side, we believe that a large gulf exists between the realistic spatial dependence of traffic links on a real network and the studied networks. This systematic review highlights that the field is approaching its maturity, while it is still as crude as it is perplexing. It is perplexing in the conceptual methodology, and it is crude in the capture of spatial information.
    Keywords: Traffic Forecasting, Spatial Correlation, Systematic Review, Traffic Network, Life-cycle
    JEL: R40 C21 C22 B23
    Date: 2016
  10. By: Michael Curran (Department of Economics, Villanova School of Business, Villanova University); Adnan Velic (Dublin Institute of Technology)
    Abstract: Employing relatively novel computational techniques, this paper examines the relation between real interest rate volatility and macroeconomic dynamics for a diverse panel of countries. Empirically, we find that interest rate volatility is quite high and persistent overall, with estimates exhibiting non-negligible heterogeneity across countries. Moreover, we highlight that volatility increases at higher interest rate levels, while it is negatively correlated with measures of macroeconomic performance such as output, consumption and investment. Our analysis demonstrates that the empirical facts can be generated by a DSGE model augmented with stochastic volatility shocks.
    Keywords: interest rates; stochastic volatility; persistence; macroeconomic dynamics; general equilibrium models
    JEL: C11 E13 E32 E43 E44 F41
    Date: 2017–04

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